Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: The U.S. Department of State states bitcoin helped drive tourists to El Salvador, Paraguay dismisses concerns about power fee hikes for bitcoin mining activities, and Salvadoran basic goods’ prices reach record highs.
Latam Insights: US Department of State Acknowledges Bitcoin Helped Revive El Salvador's Tourism, Paraguayan Government Dismisses Power Fee Hike Concerns
This article was published more than a year ago. Some information may no longer be current.
WRITTEN BY
SHARE
US Department of State Highlights Bitcoin’s Significance for Tourism in El Salvador
The U.S. Department of State has acknowledged the positive influence of El Salvador’s bitcoin adoption on the tourism boom the country is experiencing. In its 2024 Investment Climate Statements report dealing with El Salvador, the department recognized that adopting bitcoin as legal tender in 2021 has helped the country garner international attention.
As part of the report, the department stated that bitcoin has “brought significant publicity to El Salvador and has contributed to El Salvador’s increasing popularity as a tourist destination,” but apart from this, it has had “minimal impact” on El Salvador’s economy. The department stresses that El Salvador has become the fourth fastest growing destination in tourism, with its visitant numbers rising 35% from 2019 to 2023.
However, this is not only due to bitcoin. El Salvador has invested in this rebrand by hosting events like the Miss Universe pageant contest, the Central American games, and several high-profile surfing contests in 2023. According to the report, over 3.4 million visitors reached El Salvador in 2023, contributing $2.8 billion to the local economy.
Paraguay’s President Dismisses Complaints About Power Fee Hikes From Bitcoin Mining Companies, Asserts High Interest Remains
The government of Paraguay supports enacting a power fee hike of up to 14% that affects bitcoin mining operations. Santiago Peña, Paraguay’s president, recently disregarded the complaints of several bitcoin mining operators on the effect of this rise on the viability of their operations in the country.
Peña stated that, while this hike would reduce the margins of the business, it would not discourage bitcoin mining operators from maintaining their activities in Paraguay. He also highlighted the industry did not provide a significant number of jobs.
Peña also stated that the contracts signed with these companies did not include any clauses forcing the government to consult with them before enacting a fee hike. “The contract says it can increase if the cost of energy rises,” he stressed.
Finally, he specified that even with this price increase, there were still lots of bitcoin companies interested in setting up in Paraguay.
Salvadoran Basic Goods Basket Rose to Historic Highs in June
Foods and vegetables are getting costlier in El Salvador, affecting inflation levels and raising alarms about a further price acceleration. According to numbers of the Reserve Central Bank (BCR) numbers, the Salvadoran basic goods basket, a group of foods and vegetables considered essential, has reached over $260, breaking historic highs in June.
The basket price registered an all-time high of $262.17, with an increase of $5.61 over May’s price. The increase is derived from the hike in the cost of vegetables, which experienced a rise of up to 233% in just twelve days.
While prices have been going up since 2021, according to the Consumer Defense Center director Danilo Perez, there is no explanation for this brutal hike in less than a month.
To follow all the latest developments in crypto and the economy in Latin America, sign up for our Latam Insights newsletter below.
What do you think about this week’s Latam Insights report? Tell us in the comment section below.
